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November 22, 2017

VA eyes potential merger with TRICARE

Daily Briefing

    Veterans Affairs (VA) is eyeing a potential merger with the Department of Defense's (DOD) TRICARE system.


    TRICARE is a government-funded insurance program that covers servicemembers and military retirees, as well as their families. Individuals enrolled in TRICARE use private-sector physicians and hospitals.

    There's more than just M&A. Get the cheat sheet for hospital partnership and affiliation models.

    In comparison, the VA health system provides care for veterans through federally owned and operated medical centers. Certain veterans also can seek care at private providers through the VA Choice Program, which is then covered by VA. However, veterans advocates have cited limitations in the program's eligibility requirements, as well as delays in reimbursement for care. The program also faces a funding shortfall.

    VA exploring merger with TRICARE

    According to the Associated Press, VA spokesperson Curt Cashour said VA officials have been working with DOD and White House officials to consider "the general concept" of merging DOD's and VA's health care systems. Cashour said such a shift could be a "game-changer" that would "provide better care for veterans at a lower cost to taxpayers," but did not provide any specific details. He added, "This is part of [President Trump's] efforts to transform how government works and is precisely the type of businesslike, commonsense approach that rarely exists in Washington."

    Navy Commander and DOD spokesperson Sarah Higgins confirmed that DOD is working with VA to explore "many possible opportunities to strengthen and streamline the health of our servicemembers and veterans," though she declined to offer specific details "unless and until there is something to announce."

    Democrats on the House Veterans' Affairs Committee also confirmed the discussions, the AP reports. According to the AP, Griffen Anderson, a spokesperson for Democrats on the committee, said officials are considering a move that essentially would combine the VA Choice Program with TRICARE's private health care programs.

    Stakeholders express concerns

    Some lawmakers and veterans group expressed concerns about merging VA's health care system with TRICARE and pledged to oppose the idea.

    House Minority Leader Nancy Pelosi (D-Calif.) said, "House Democrats will fight tooth and nail against any efforts to diminish or destroy VA's irreplaceable role as the chief coordinator, advocate, and manager of care for veterans."

    Carrie Farmer, a senior policy researcher on military care at Rand Corp., said, "My overarching concern is these are very dramatic changes in the way health care is delivered to veterans," adding, "There haven't been studies on what the consequences are in terms of both costs and quality of care."

    Bob Wallace—executive director of Veterans of Foreign Wars' (VFW) Washington, D.C, office—said, "VA is a health care provider and the VFW would oppose any effort to erode the system specifically created to serve the health care needs of our nation's veterans by reducing VA's role to a payer of care for veterans."

    Louis Celli, director of veterans' affairs and rehabilitation for The American Legion, cited rising copayment requirements for TRICARE beneficiaries as a reason VA should not merge with the program. "The precedent the TRICARE model sets is not something we would accept on the VA side," he said (AP/Sacramento Bee, 11/17; Minemyer, FierceHealthcare, 11/20).

    There's more than just M&A. Get the cheat sheet for hospital partnership and affiliation models.

    The field guide to hospital partnership and affiliation models

    Behind the flurry of M&A in recent years, a deeper trend of hospital integration is underway: the emergence of alternative partnerships that secure many of the same benefits of M&A without the financial and legal commitment: Clinical affiliation, regional collaborative, accountable care organization, and clinically integrated network.

    This guide defines these types of partnerships and offers benefits, drawbacks, and examples of organizations in each.

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